Universal Display Corporation Announces Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091109006547/en

EWING, N.J.--(Business Wire)--
Universal Display Corporation (NASDAQ: PANL), a key innovator behind today`s and
tomorrow`s evolving displays and lighting with its Universal PHOLED
phosphorescent OLED technology and materials, today announced its results for
the third quarter and nine months ended September 30, 2009.

Revenues for the third quarter of 2009 were $5,145,393, compared to $2,625,639
for the third quarter of 2008. Commercial revenue, which includes commercial
chemical revenue, license and royalty revenues, and commercialization assistance
revenue, was $1,621,416 for the quarter, compared to $1,324,924 for the third
quarter of 2008. Developmental revenue, which includes development chemical
revenue, contract research revenue, and technology development revenue, was
$3,523,977 for the quarter, compared to $1,300,715 for the third quarter of
2008.

The increase in development revenue for the third quarter of 2009 included a
non-refundable payment of $1,500,000 that the company received from Kyocera
Corporation ("Kyocera") last year. This payment was for technical assistance
previously provided to a subsidiary of Kyocera established to conduct its OLED
activities. The payment was previously classified as deferred revenue because it
was creditable against a portion of the upfront fee under the company`s license
agreement with Kyocera. The license agreement was to become effective upon
notice from Kyocera given on or before December 31, 2009. Kyocera has since
indicated that it will not be providing this notice because its OLED subsidiary
has been dissolved.

For the third quarter of 2009, the company reported a net loss of $4,672,847, or
$(0.13) per diluted share, versus a net loss of $5,302,983, or $(0.15) per
diluted share, for the third quarter of 2008. The improvement in the net loss
was primarily due to an increase in revenues during the quarter, partially
offset by a decrease in interest income, an increase in operating expenses and a
loss on a stock warrant liability.

For the nine-months ended September 30, 2009, the company reported revenues of
$10,935,605, compared to revenues of $7,488,056 for the same period of 2008.
Commercial revenue for the first nine months of 2009 totalled $4,229,609,
compared to $4,275,476 for the same period of 2008. Developmental revenue for
the first nine months of 2009 totalled $6,705,996, compared to $3,212,580 for
the same period of 2008.

For the nine months ended September 30, 2009, the net loss totalled $16,657,624,
or $(0.46) per diluted share, versus a net loss of $14,702,158, or $(0.41) per
diluted share, for the same period of 2008.

"This was an encouraging quarter for Universal Display, with gains in both
royalty and license fee revenue," said Sidney D. Rosenblatt, Executive Vice
President and Chief Financial Officer of Universal Display. "We are seeing
increased advertising and marketing of our licensees` products that feature
AMOLED displays and our technology and materials, and an associated increase in
adoption of these products. We believe that this trend will continue and sales
of these products will increase as the global economic environment continues to
improve."

Mr. Rosenblatt continued, "We are encouraged by the rate of research and
development on flexible displays for the U.S. Department of Defense and energy
efficient white OLED lighting for the U.S. Department of Energy. Looking ahead,
as the market for small-area AMOLED displays continues to mature, we expect
growth in larger-area AMOLED displays for the TV market in 2010 and beyond."

Operating expenses were $8,938,169 for the third quarter of 2009, compared to
$8,458,503 for the same quarter of 2008. Operating expenses for the quarter were
consistent with expectations and are expected to remain at or near the same
level in the near-term.

Cash used in operating activities was $11,831,763 for the nine months ended
September 30, 2009, compared to $6,034,956 for the same period of 2008. The
increase in cash used in operating activities was mainly due to additional net
losses, excluding non-cash charges, of $2,452,975 and a decrease in deferred
license fees and deferred revenues as a result of lower cash payments of
$2,033,333 from various customers.

The company`s balance sheet remained strong at quarter end, with cash, cash
equivalents and short-term investments totalling $66,024,043 as of September 30,
2009, compared to $77,454,200 as of December 31, 2008.

In conjunction with this release, Universal Display will host a conference call,
followed by a question and answer session, on Monday, November 9, at 5:00 p.m.
Eastern Time. Interested parties may participate by calling 706-634-1395at4:55
p.m. Eastern Time and referencing conference PIN 39209446. A taped replay of the
conference call will be available within two hours of the conclusion of the call
and will remain available through Monday, November 23, 2009. The number to call
for the taped replay is 706-645-9291 and the conference PIN is 39209446.

The conference call will be simultaneously broadcast live over the Internet
through a webcast on the Universal Display website. To access the call, please
visit the website at www.universaldisplay.com. An online archive of the webcast
will be available within two hours of the conclusion of the call.

About Universal Display Corporation

Universal Display Corporation is a world leader in developing and
commercializing innovative OLED technologies and materials for use in flat panel
displays, solid-state lighting products, electronic communications and other
opto-electronic devices. Universal Display is working with a network of
world-class organizations, including Princeton University, the University of
Southern California, the University of Michigan, and PPG Industries, Inc.
Universal Display has also established numerous commercial relationships with
companies such as Chi Mei EL Corporation, DuPont Displays, Inc., Konica Minolta
Technology Center, Inc., LG Display Co., Ltd., Samsung Mobile Display Co, Ltd.,
Seiko Epson Corporation, Sony Corporation, Tohoku Pioneer Corporation and Toyota
Industries Corporation. Universal Display currently owns or has exclusive or
sole license rights with respect to more than 960 issued and pending patents
worldwide.

Universal Display is located in the Princeton Crossroads Corporate Center in
Ewing, New Jersey. Universal Display`s state-of-the-art facility is designed to
further technology and materials development, technology transfer to
manufacturing partners and work with customers to develop OLED products that
meet their needs. Visit Universal Display on the Web at
www.universaldisplay.com.

Forward-Looking Statements: All statements in this document that are not
historical, such as those relating to Universal Display Corporation`s
technologies and potential applications of those technologies, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue reliance on
any forward-looking statements in this document, as they reflect Universal
Display Corporation`s current views with respect to future events and are
subject to risks and uncertainties that could cause actual results to differ
materially from those contemplated. These risks and uncertainties are discussed
in greater detail in Universal Display Corporation`s periodic reports on Form
10-K and Form 10-Q filed with the Securities and Exchange Commission, including,
in particular, the section entitled "Risk Factors" in Universal Display
Corporation`s annual report on Form 10-K for the year ended December 31, 2008,
as amended. Universal Display Corporation disclaims any obligation to update any
forward-looking statement contained in this document.

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

September 30, December 31,
2009 2008

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 10,608,785 $ 28,321,581
Short-term investments 55,415,258 49,132,619
Accounts receivable 1,886,345 2,450,444
Inventory 42,700 2,209
Other current assets 502,479 462,908
Total current assets 68,455,567 80,369,761
PROPERTY AND EQUIPMENT, net 11,509,541 12,859,628
ACQUIRED TECHNOLOGY, net 1,658,040 2,929,344
OTHER ASSETS 237,758 69,772

TOTAL ASSETS $ 81,860,906 $ 96,228,505

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 1,915,730 $ 1,585,015
Accrued expenses 4,719,417 5,296,433
Deferred license fees 6,097,868 6,148,267
Deferred revenue 287,634 2,739,790
Total current liabilities 13,020,649 15,769,505
DEFERRED LICENSE FEES 2,946,237 3,407,037
DEFERRED REVENUE 225,000 337,500
STOCK WARRANT LIABILITY 3,810,190 -

Total liabilities 20,002,076 19,514,042

SHAREHOLDERS' EQUITY:

Preferred Stock, par value $0.01 per share, 5,000,000 shares authorized, 200,000 shares of Series A Nonconvertible Preferred Stock issued and outstanding (liquidation value of $7.50 per share or $1,500,000) 2,000 2,000
Common Stock, par value $0.01 per share, 50,000,000 shares authorized, 36,677,168 and 36,131,981 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively 366,772 361,320
Additional paid-in capital 254,673,492 256,696,849
Unrealized gain on available-for-sale securities 77,575 126,497
Accumulated deficit (193,261,009 ) (180,472,203 )

Total shareholders' equity 61,858,830 76,714,463

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 81,860,906 $ 96,228,505

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

Three Months Ended September 30,
2009 2008

REVENUE:
Commercial revenue $ 1,621,416 $ 1,324,924
Developmental revenue 3,523,977 1,300,715
Total revenue 5,145,393 2,625,639

OPERATING EXPENSES:
Cost of chemicals sold 277,218 226,574
Research and development 4,938,705 4,848,724
Selling, general and administrative 2,656,005 2,445,145
Patent costs 955,119 839,443
Royalty and license expense 111,122 98,617
Total operating expenses 8,938,169 8,458,503

Operating loss (3,792,776 ) (5,832,864 )
INTEREST INCOME 121,927 545,561
INTEREST EXPENSE (386 ) (15,680 )
LOSS ON STOCK WARRANT LIABILITY (1,001,612 ) -

NET LOSS $ (4,672,847 ) $ (5,302,983 )

BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.13 ) $ (0.15 )

WEIGHTED AVERAGE SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER COMMON SHARE 36,481,603 35,989,473

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

Nine Months Ended September 30,
2009 2008

REVENUE:
Commercial revenue $ 4,229,609 $ 4,275,476
Developmental revenue 6,705,996 3,212,580
Total revenue 10,935,605 7,488,056

OPERATING EXPENSES:
Cost of chemicals sold 766,396 669,012
Research and development 15,482,462 13,506,318
Selling, general and administrative 7,994,021 7,658,508
Patent costs 2,510,379 2,226,853
Royalty and license expense 279,484 297,086
Total operating expenses 27,032,742 24,357,777

Operating loss (16,097,137 ) (16,869,721 )
INTEREST INCOME 563,920 2,202,123
INTEREST EXPENSE (3,327 ) (34,560 )
LOSS ON STOCK WARRANT LIABILITY (1,121,080 ) -

NET LOSS $ (16,657,624 ) $ (14,702,158 )

BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.46 ) $ (0.41 )
WEIGHTED AVERAGE SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER COMMON SHARE 36,388,939 35,887,264

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

Nine Months Ended September 30,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (16,657,624 ) $ (14,702,158 )
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred license fees and deferred revenue (3,342,522 ) (756,200 )
Depreciation 1,552,826 1,421,274
Amortization of intangibles 1,271,304 1,271,304
Amortization of premium and discount on investments, net (356,571 ) (942,761 )
Stock-based employee compensation 1,420,170 1,117,727
Stock-based non-employee compensation 7,011 4,119
Non-cash expense under a materials agreement 851,587 882,540
Stock-based compensation to Board of Directors and
Scientific Advisory Board 321,300 345,691
Loss on stock warrant liability 1,121,080 -
(Increase) decrease in assets:
Accounts receivable 564,099 602,655
Inventory (40,491 ) 38,956
Other current assets (39,571 ) 24,031
Other assets (167,986 ) 7,500
Increase in liabilities:
Accounts payable and accrued expenses 1,396,958 2,350,366
Deferred license fees - 2,000,000
Deferred revenue 266,667 300,000
- -
Net cash used in operating activities (11,831,763 ) (6,034,956 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (202,739 ) (1,171,327 )
Purchases of short-term investments (57,674,990 ) (62,028,220 )
Proceeds from sale of short-term investments 51,700,000 88,158,000

Net cash (used in) provided by investing activities (6,177,729 ) 24,958,453
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock 52,887 -
Proceeds from the exercise of common stock options and warrants 1,102,335 2,387,660
Payment of withholding taxes related to stock-based employee compensation (858,526 ) (766,721 )

Net cash provided by financing activities 296,696 1,620,939

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (17,712,796 ) 20,544,436
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 28,321,581 33,870,696

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,608,785 $ 54,415,132

For:
Universal Display Corporation
Dean Ledger, 800-599-4426

From:
Gregory FCA Communications
Investor contact:
Paul Johnson, 610-642-8253 (x115)
paul@gregoryfca.com
or
Media contact:
Matt McLoughlin, 610-642-8253 (x129)
matt@gregoryfca.com

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